Sources: DEA probes Silk Road, suspected online hub for illegal drugs

Still image frame of the website "Silk Road" anonymous market place.

Silk Road, an online marketplace considered by authorities to be a hub of illegal Internet drug sales, is being used to purchase heroin, cocaine, opioid pills, LSD, Ecstasy and other drugs, according to law enforcement sources.

Authorities have been unable to track the location of the website's servers, the sources said, because Silk Road can only be accessed using encryption software called Tor, which hides computers' IP addresses and allows users to surf the Web anonymously.

Tech-savvy Long Island and New York City residents are using the site, which authorities estimate has facilitated more than $30 million in annual sales, the sources said. The site came online in February 2011.

These law enforcement sources, who spoke on the condition of anonymity, said the Drug Enforcement Administration and Department of Justice are investigating the site.

Drug war's new front

Silk Road's success has signaled the opening of a new front in the battle against illegal drugs, officials say, in which dealers and customers use technology to hide their identities and flout state and federal laws.

Among the drug buyers on Silk Road are computer users in Nassau and Suffolk counties, as well as Manhattan, Brooklyn and Queens, the sources said. The number of customers in the metropolitan area is unclear, because of the difficulty investigators have in tracking Silk Road orders to precise locations.

"Silk Road is a dangerous and destructive website that facilitates crime and poses a true danger to people across the country," said Sen. Charles Schumer (D-N.Y.), who has called on the federal government to shut down the site.

The DEA said officials are aware of Silk Road and are being "very proactive in keeping abreast" of the high-tech tools online drug sellers use to avoid detection.

Silk Road's customers sell drugs and other items to one another through the online marketplace and, like users of legitimate shopping sites, rate delivery performance as well as the quality of the products they buy, authorities say. Other illicit items are also available, including forged documents and untaxed cigarettes.

To make sure the money exchanged on Silk Road can't be traced back to customers, the site uses a digital, untraceable currency called Bitcoins, which are purchased anonymously online with real money. Drugs on the site are typically sold at a significant markup, sometimes costing twice as much as their street price.

After a purchase is made, sellers are instructed to ship drugs through the postal service in vacuum-sealed packs, while buyers are advised to have shipments mailed to post office boxes or locations other than their home. Upon delivery of the drugs, Bitcoins are transferred from buyer to seller via a secure escrow account on the site. Silk Road takes a commission of up to 10 percent on all sales.

A successful system

"So far, unfortunately, their system has been somewhat successful," said a federal law enforcement source involved in the investigation into the site. "Our goal is to make sure that doesn't continue to be the case."

Federal charges have yet to be brought against the site or its administrators, but another law enforcement source involved in the Silk Road probe said high-tech investigative methods used by the government are helping investigators build a case.

Those methods include encryption-cracking technology and the exploitation of security weaknesses in some encrypted email and instant message software used by Silk Road customers, the source said.

Efforts to find any known operator of Silk Road were unsuccessful.

Risks remain the same

Anti-drug activist Alex Rice, 38, formerly of Massapequa, said he routinely speaks to children about the dangers of the site. He said his son, Aaron, narrowly survived an overdose in 2011 from heroin he had purchased from a user on Silk Road.

"The risks posed by the drugs on this website are just as high as on the street, in terms of how quickly they can kill you or get you sent to jail," said Rice, who now lives in south Florida, where he talks to youth groups about avoiding drug use. "To gain all this knowledge of encryption and computers only to throw it away on buying and selling drugs online . . . I can't imagine more of a waste of knowledge."

"I hope it doesn't take someone dying to get it shut down," he said.

Suffolk Police Deputy Chief of Detectives Mark Griffiths said the department's cybercrime and drug investigators are keeping tabs on Silk Road, as well as other drug trafficking sites.

"We are actively monitoring it," Griffiths said. "We work with DEA and the U.S. postal inspector, and keep abreast of all the technological changes."

Nassau police declined to comment on the site and referred questions to the DEA.

Andrew Kratz, a corporate Web security consultant from Southampton, said Silk Road has "perfected" the anonymous online drug trade and will be "tough to take down."

"The people who run that site are very, very good at what they do," Kratz said. "But so is the Department of Justice."